An urban construction site illustrating supply stacks, cranes and on-site crews amid tariff and worker health pressures.
New York City, September 4, 2025
Tariff-driven cost uncertainty and a growing mental-health and overdose crisis are reshaping project decisions, staffing and funding across the construction industry. Owners and developers are adjusting procurement, contract terms and schedules to manage material-price risk while many firms reorganize regionally to capture efficiencies. Legal teams are being engaged earlier to set expectations and preserve options, and technology including AI is used for modeling and document control. Employers and sector groups are expanding mental-health outreach, naloxone training and task forces. Recovery is uneven: residential and remodeling work is improving while nonresidential activity lags pending major projects and policy shifts.
The current construction landscape features tariff uncertainty and global supply-chain volatility as dominant headwinds for owners and developers. Projects face questions about whether tariffs will exist, how much they will be, and how tariff‑driven cost increases will affect margins and viability. In response, clients are adopting earlier procurement and sourcing changes to reduce exposure, while increasingly leveraging technology and evolving contract language to manage risk. A prominent legal practice notes that early involvement of legal counsel is critical to shaping project parameters, expectations, and rights should costs shift during progression, completion, or closeout. A dedicated team supports clients through every project stage, with a focus on keeping owners equipped to exercise contractual levers when needed.
Because the construction market operates on a global scale, tariff-driven cost increases can influence decisions on whether a project proceeds. Contractors are seeking contractual language that would reimburse tariff costs by the project owner, a stance that owners generally understand but must weigh against overall project economics. Even as some clients push for local (U.S.-based) sourcing to avoid tariffs, the market’s highly globalized materials supply makes true localization difficult. Early procurement is seen as a hedge against tariff implementation or rate changes, though it carries risks in a volatile market. In this environment, project teams emphasize that designs and agreements cannot be left to languish; instead, they require ongoing governance and timely decision‑making to manage cost and schedule exposure.
Industry observers describe the design and construction process as an extremely complicated and risky transaction. As a result, legal involvement at the outset and throughout project progression is viewed as essential to align terms, manage expectations, and ensure owners can exploit contractual levers at key milestones. A dedicated practice notes that its team supports owners and developers from inception to closeout, including contract negotiations and real‑time advisory during fast‑paced builds. The goal is to position owners to secure favorable outcomes at closeout and to mitigate potential overruns.
Technology already plays a massive role in project management, document control, and modeling. AI is viewed as having the potential to accelerate processes and inform project management decisions, though human supervision and labor are expected to remain essential as robotics expand the scope of work. In practice, firms report that real‑time advisory and streamlined processes can help owners leverage front‑end agreements to manage risk as projects unfold.
Industry data highlight a crisis in worker mental health and substance use. More than 5,000 construction workers in the U.S. died by suicide in 2023, and construction is among the sectors with high rates of suicides. Workplace safety and health issues are tied to chronic pain, sleep disruption, and stress, which can drive anxiety, depression, and misuse of opioids. Authorities emphasize that mental health support, substance‑use training, and access to life‑saving interventions are critical. In New York City, officials and unions have stepped up efforts, with budgets targeting safety training, day‑laborer services, and programs for immigrant workers. Programs that educate workers on overdose reversal and provide Narcan training are being expanded, supported by partnerships across industry groups. In the city, the construction sector accounts for a meaningful share of fatal injuries, with ongoing public safety campaigns and workforce wellness initiatives aimed at reducing harms and supporting workers’ well‑being.
New York State’s comptroller notes that lagging demand for non‑residential construction has slowed NYC’s recovery, keeping the city below pre‑pandemic employment levels. The immigrant share of NYC construction jobs remains high, underscoring the importance of policies and programs that support this workforce. Public authorities identified staffing reductions at permit offices and longer processing times as factors that can hinder growth, while eyeing steps to accelerate permitting and support infrastructure development. The city’s megaprojects—ranging from a major bus terminal rebuild to Penn Station reconstruction—are central to the outlook, alongside the MTA’s multi‑year capital plan that funds accessibility improvements, bridge and tunnel repairs, and the start of new transit connections.
Regional infrastructure consolidation efforts are advancing through joint ventures and corporate realignments designed to achieve economies of scale and consistent risk management. A transportation and water infrastructure firm formed from a spinoff within a larger group is targeting the NYC metro region’s tunnels, bridges, roadways, and water systems, with leadership drawn from legacy entities. The broader corporate family operates across many states and provinces, reflecting a broader trend toward cross‑jurisdictional capabilities in large‑scale civil work. The integration is described as value‑accretive for shareholders and expected to streamline delivery across complex projects. In parallel, major local projects continue to be planned and funded, with the Port Authority and MTA among the agencies guiding large, long‑cycle initiatives slated for 2030s completion windows.
One notable completed project is a 21‑story mixed‑income residential building featuring cultural space integrated with a local theater program, signaling how urban redevelopment is pairing housing with arts and community spaces. The development uses a city incentive program designed to encourage mixed‑income growth along a major corridor and to support cultural institutions. The design team combined a modern brick exterior with a varied window pattern and front‑of‑house amenities, including coworking space, fitness facilities, and curated library spaces. The project also showcases a ground‑floor commercial footprint and proximity to transit lines, illustrating how new housing can be paired with accessibility gains.
Looking forward, the construction market will continue to adjust to evolving demand signals, regulatory changes, and global supply dynamics. Stakeholders emphasize that the best path to resilience lies in proactive risk management, early legal involvement, strategic procurement timing, and the thoughtful use of technology to streamline processes while preserving critical human oversight.
The dominant factors include tariff uncertainty, supply-chain volatility, and general cost‑and‑margin risk that influence whether projects proceed as planned.
Owners are pursuing earlier procurement, changes in sourcing strategies, and contractual language that addresses tariff costs to protect project economics.
Early and ongoing legal involvement helps set project parameters, manage expectations, and preserve contractual leverage during progression, completion, and closeout.
Data show elevated risks of suicide and overdose in construction, prompting expanded safety training, Narcan education, and workforce wellness initiatives, including immigrant worker support programs.
Major public projects and a large capital plan, along with local policy proposals on wages and safety databases, influence the city’s construction pipeline and workforce opportunities.
| Feature | Summary |
|---|---|
| Tariff uncertainty | Unclear whether tariffs will continue, how much they will cost, and their impact on project viability. |
| Procurement strategy | Earlier procurement and local sourcing efforts are used to mitigate tariff risk, despite challenges in local supply chains. |
| Legal involvement | Early and sustained legal counsel is emphasized to set parameters and preserve leverage across project milestones. |
| Technology and AI | Digital processes and AI are increasingly shaping project management and decision making, with ongoing human oversight required. |
| Mental health and overdoses | Substantial focus on worker well‑being, with training, Narcan programs, and employer/industry partnerships to reduce risks. |
| NYC megaprojects and funding | Major city and regional infrastructure plans, including transit, roads, and multi‑year capital programs, influence workload and workforce needs. |
| Immigration workforce | Immigrant workers constitute a large share of NYC construction jobs, underscoring the importance of inclusive workforce policies. |
| Ray Harlem project | Completed mixed‑income residential development with cultural space, using a city incentive to promote mixed‑income growth and arts integration. |
| SPC Construction | New civil infrastructure firm formed from a spinoff to serve NYC metro area needs, aiming for economies of scale and consistent risk management. |
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